Chapter 14: Insider Dealing and Market Manipulation Regulation

Question 1

What are the conditions which inside information should meet?

Answer 1

• Information should be of precise nature
• Not been made public
• Relating directly or indirectly to one or more issuers or instruments
• If it made public, would be likely to have a significant effect to price.

Question 2

In regards to inside information, what financial instruments cover?

Answer 2

All instruments

Question 3

To which persons does insider dealing apply?

Answer 3

To any person who knows, or ought to know, that the information they possess is inside information.

Question 4

Information is considered to be made public when:

Answer 4

• It comes to the knowledge of investors, or it may be easily and legally obtained, or
• It is included in archives or other documents available to the public, or
• It has derived from public information.

Question 5

In which cases insider dealing is not insider dealing?

Answer 5

• When a market maker is executing transactions on behalf of a third party with no inside information.
• In obligations from agreements concluded before obtaining the inside info.

Question 6

What is the purpose of the market sounding?

Answer 6

To test the interest of the potential investors.

Question 7

In which cases may firms delay public disclosures?

Answer 7

• Where immediate disclosure is likely to prejudice their legitimate interests, and
• Where the delay is not likely to mislead the public, and
• Where the confidentiality of the information can be ensured, and
• Where the competent authorities have consented to the delay.

Question 8

When should a firm submit the insiders list?

Answer 8

Upon request from the competent authority

Question 9

What should be included in the insiders list?

Answer 9

The reason for inclusion in the list

Question 10

For how long should the insiders list be maintained?

Answer 10

For a period of at least 5 years.

Question 11

What is a market manipulation practice?

Answer 11

The buying or selling of financial instruments at the closing of market.

Question 12

Who approves accepted market practices?

Answer 12

ESMA

Question 13

How often are market practices reviewed?

Answer 13

Every 2 years

Question 14

What are the fines of insider dealing, market manipulation and unlawful disclosure?

Answer 14

• For natural persons: 5 million euros

* For legal entities: 15 million euros or 15% of total annual turnover.